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- Full Description
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When investors tune in to any mainstream financial news channel, peruse almost any financial blog or news article, or even turn to their brokers for much-needed investment advice, they are inundated with misinformation about all the advantages—and yet never any of the downfalls—of the latest get-rich-quick investment scheme or breakout stock du jour. Some investors will follow the so-called investment gurus blindly (and lose their shirts in the process), while others know better than to take the bait. But the question remains: Where can serious investors turn to find the unbiased strategies they need to help them improve their overall investment results?
In Invest Like an Institution, Michael C. Schlachter tackles this perennial question head-on and reveals that investors looking to boost their returns without taking on added portfolio risk can do so if they turn their attention to one of the few categories of players in the investment arena that consistently outperforms the market: large institutional investors. Sure, average retail investors can't make the same types of blockbuster private deals in real estate, private equity, or hedge funds that institutional investors use to offset the negative impact of volatile markets. But as Schlachter demonstrates in this invaluable resource, what individual investors can do is replicate in their own portfolios the very same diversification strategies that larger funds employ to achieve outsized, long-term gains. To that end, Schlachter provides readers with the tools and road map they need to build a portfolio that is every bit as diversified and risk-controlled as a multi-billion-dollar institutional fund.
Filled with easy-to-implement guidelines that will put individual investors on the path to financial success without encouraging them to chase trends, take on unneeded risks, or spend unnecessary fees, Invest Like an Institution analyzes:- The merits of a global portfolio versus those of a home country-biased portfolio;
- How newer investment trends, like fundamental indexation and enhanced indexation, are used by institutional investors to supplement a well-diversified portfolio;
- Why fixed income investments are not as safe as most investors think;
- The best alternative asset classes that are readily available to individual investors;
- And much more.
If you're looking to make a small fortune in the investment world, it's fairly easy to do so: Just start with a large fortune and start chasing the latest trends and "hot" advice. But if you'd rather grow your wealth in a risk-controlled manner over time, follow the proven investment advice in Invest Like an Institution, which will help insure that your investments are properly positioned for whatever befalls the market: bubbles and busts, growth and recession, war and peace, predictability and surprises.What you’ll learn
Readers of this book will learn:- How to keep your wealth intact and grow it in a risk-controlled manner over an extended period of time.
- How to implement the investment and asset allocation strategies used by the largest and most successful institutional investors into your own portfolio.
- The unique advantages that individual investors have over institutional investors—and how to leverage those advantages to your benefit.
- How to diversify your assets like the big funds do, no matter whether you are a young investor or are getting a late start on saving for retirement.
- The best diversification strategies for structuring your investments in both stocks and bonds.
- How alternative asset classes can enhance their returns while minimizing their risk.
Who this book is for
Designed specifically for the individual investor, Invest Like an Institution will appeal to active investors and savers of all ages, from Baby Boomers who are closing in on retirement to young adults who are struggling to determine the proper way to manage their investments and direct their asset allocation mix.
- Table of Contents
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Table of Contents
Introduction
Chapter 1: How You Compare to the Big Funds
- What Advantages Do You Have?
- Politics Don't Weigh You Down
- Freedom from the Need for Consensus
- Investing Only to Make Money
- The Constituency of You
- What Disadvantages Do You Have?
- Lack of Information and the Importance of a Trusted Advisor
- Don't Quit Your Day Job
- Your Investments, Your Problem
Chapter 2: Asset Allocation
- How the Big Funds Diversify
- Asset Allocation and You
- Standing By Your Targets
- The Exceptions to the Rule
- Start Early for Optimal Results
- What to Do If You're Starting Late
- How Pension Plans Fit Into the Equation
Chapter 3: Investment Structure for Stocks
- Value Stocks versus Growth Stocks
- Large Investing versus Small Investing
- Mid-Cap Investing
- Global Portfolios versus Home Country-biased Portfolios
- Active Investing versus Passive Investing
- Newer Trends
- Mixing and Matching
Chapter 4: Investment Structure for Fixed Income
- How Safe Is It, Really?
- What Duration Is Right for You?
- Why Fixed Income Managers Are More Likely to Succeed
- Merits of "Plus" Sectors
- Incorporating "Plus" Sectors Into Your Investment Mix
Chapter 5: Investment Manager Selection
- The Wilshire Study and How It Related to You
- The Problem with Universe Rankings
- One-, Three-, Five-, and Ten-year Performance Tables versus Rolling Three-Year Performance Tables
- Why Manager Reviews, Rankings, and Tenure Are So Important
Chapter 6: Alternative Asset Classes
- Real Estate
- Private Equity
- Hedge Funds
- Asset Allocation Outputs
Chapter 7: Fees and Expenses
- Planners versus Brokers
- No "Loads" Ever
- The Long-Term Impact of Small Differences in Fees
- The Benefit of Breakpoints
- ETFs and Securities versus Funds
Chapter 8: Mistakes to Avoid and War Stories
- Trend Chasing
- Thinking You Are Smarter than the Crowd
- Risking the Surplus or Reducing Contributions
- Throwing in the Towel at Market Tops and Bottoms
- Buying In to Someone Who Is Selling You the "Next Best Thing"
Chapter 9: Putting It All Together- What Advantages Do Pension Plans Have Over Individual Investors?
- How to Maintain a Long-Term, Static, Unemotional Approach to Asset Allocation
- How to Reduce Your Costs and Avoid Fees
- Errata
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